The world’s late-August, long-overdue market correction is sending a message that we need to take to heart: the billionaires are overreacting to Chinese policy moves because they know they have once again created the conditions, through their own avarice, for an historic financial collapse.
The current global stock plunge is not, so far, terribly serious, yet it matters because of the consistency of the decline and because it lasted over a weekend. Mostly, however, its significance lies in its message: we, the rich, are not confident. The rich, gamboling and gambling on Wall St. and in its lesser casinos, have overreacted to a very small Chinese financial correction precisely because they know that their behavior since the Great Recession of 2008–which they caused–has been nothing if not criminally irresponsible. In a word, they in their hubris have managed to blow the old bubble back up again, and they know they are sliding around on its soapy surface waiting for it to pop.
China’s economy has its own bubble, Europe is in the midst of a dirty financial civil war that is only going to get worse, and the U.S.–focused on pandering to the billionaires–has blown its opportunity to reform its financial system and thus remains stuck in the moral equivalent of recession. Whether measured by the number of homeowners who lost their homes, the number of total workers, the wages of those workers, the benefit packages those workers have, the number who have dropped out of the employment picture as a result of disenchantment with the system, or the number on food stamps, Americans remains in recession…except for the 1% who are nervously sliding around on the top of that stock market bubble irresponsible politicians have once again allowed them to puff up for their personal profit. The message, the meaning of the current little (so far) market slide is that the billionaires are scared…as well they should be. This in itself would be a good thing except that the thing about billionaires is that when they fail, we are the ones who pay.